Minister Enthusiastic Over Exchange Cut

Chronicle (Levin), 23 August 1948, Page 5

Minister Enthusiastic Over Exchange Cut

Preis /JsodiUUbfi)

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' t WElLINGTQn,.. August 22. The Gfovfernfhfe'ht intehded to adherelirmly to the pfice coiitiol p'b'licy hnd make absolutely. certain the full acV vantage of the adjustment in the exchange rate Was passed. to the cohsumers, Stated llb'n. W. N&sii ih a broadcasl Whfefhin fie discussed. tlie Gtivefiiln&ht/s deciSioh to briiih New Zealand currency tb paiity with Sterling. .The Minister said there Was nb dohbf that tlie alteration , would beneilt eyery-. body. He discussed its advantages and disadvantages and denied that the apprec'iatioh niade iit tlie value bf New Zealaiiil cut ffehey ' waS eolitfary to the general agrbe'iheiit uA trade tkriifs made at Geneva last year aud; ratilled by the New ^fe'filand Parli-inient this session. He elaimed that the a'ctioh taken Wouid i'acilitate tfitdb aird that that was precisfe'ly What the agfeehieiit Wras deslgned to dbv The Aiilristdf said the Goverixnient's decisioh tb appfeeiate the currency wa. a step of nihjbr- nutidndl. intportaiice. in sihxple terihs ,the . ppsition was that u'xxtil ImUikday, li'Xght; ilve .Ne'w Zeafanu poxinds . were \yorth fonr pouiids of BriJxirt's and the ' difEere.hce Was the rate of. exckUnge. Nb'w it was llve for live ox; parity— our pouixd waS 'now equal to* the Britislt " pouud stefling. In Nortl'i Axxxerican ciiryencies .tlxe rate of ex ehangfc on Tliurstiay* Was £1 New Zearand fbf 31 dbllarS.' No\V it was £.1 NcW Zealand for. foiif xlo'.thii's. Tlie New Zealand pouixd today would buy 25 per eexxt. nxore ,-goods . oyerseas than on Thursday.'" c * There was ua doubt- the exchangc alteration would b'enblxt e.Very()'Ody. 'Syhxe Wouhl beneiit iminediately and tlirectly and otiifers wbul(l share in tlie national tid vantage. .. The Alinister said there w*as never a more Suitable time thaii the present tb make aii adjustment ixi the exchangc rate. The devaliiatio{i,t>f the pound had been doxie p'rifnafily. to lielp NcW Zea land farnxers out. of U slump and asvc thenx froril bankruptcy. There was no xloub't that tlxe NtjW .Zealand pxoducer would tohtinne to ; prbsper. it was expected piiees would. hontil'rue as higli as they had. for wubl and (he payotit to. tlife' (laifV farme'r Wbuld nof be. ail'cctcrl. Palmers' costs pvould be reduced a S a rekult of the lower prie'es for l'arn. x-equisites and they would also beneiit from a lower cOst of llving. Tlxe stauilisatibn pool accbixnts wero wortli niore now in terms of the lower prire r'nxnxers Wo.uld pay .i'jpr impbried goods ahxl lnaterials. The .sa'nxe applied to alf Savings. ■ ■ •* Thougli all sectioixs of the cOmmufxit^ would bcrtcht, there' might be some particular difh'cufty to irrxporte'rs hqlding sto«Hc.s' b'bught at the :olrl rate. lle we> canvijiced, on Ihe evnlence of dexnand, they would' be able)'io clear a l'airJ\ lai-ge portiob of' the guods before goods bonght at- the ixew Fatd arrived in any quaiuity. lle would suggest that the . wxs'esi course Was iprTt4e.uL to ,xneet;. the ''Aew aitua tion. at i'ohye *;and Uvlteii" xiew" goods came they would ' be at a price ijcncilcial all. .rouxid. Tlie restoxatipn to parxty did not . iiK-iiii tlicx e coul'il be'more goods buptluraie of demand woixld be lriaintained. Noihiftg had been doxie which would hurt Britain. CJn the contr'afy, the sierJxng pnx-6 for goods- remained un-V-haiiged and British' manufacturers would iind New I^eahiiid a betten marlcet oecause goods coul'a be sold here Clieaper. The rcdl co'st 6f imports from dollar sources wodld not change to tlie extent that doila-i1e had to be found but •Wherexis the dbliar hhtl been worth (Js 4x1 it was now 4s lOd'and the disparitv wliiclx previously evisted whereby New Zcaiaxxu had sonietimes to pay" high prices for dollar go'ods While dollar sburces could purcJxase. .New Zealand goods at a lower' price, tirouJd be removed.